The EU Wants to Boost Growth and Airbnb and Uber May Benefit Big

Since some member states in EU have to deal with terrorism and immigrate crisis, their budget was strained. In order to promote economic growth, EU commission sought to reduce conflicts between Airbnb,Uber and national regulators.

The European Commission is seeking to boost growth in the 28-nation bloc by quelling conflicts between national regulators and companies that tap into shared consumption such as Uber Technologies Inc. and Airbnb Inc.

The EU’s executive arm is planning discussions with member states to explore how national rules may be blocking companies’ expansion efforts and expects to issue guidance on how EU law applies to collaborative business models.

Companies like Uber and Airbnb may provide a boost to the economic output of the EU, which has lagged the U.S. in gross domestic product since 2012, at a time when national budgets are strained as countries deal with extraordinary measures from terrorism to the immigration crisis. Individual nations vary in their acceptance of the new technologies, according to EU Commission Vice President Jyrki Katainen.

“We need a dialogue with member states, in order to raise their awareness that there’s a contradiction that might have a negative impact to economic growth in their country,” Katainen said in an interview. “If they are in contradiction with the EU law, then we will use our enforcement policy to ensure compliance of the EU law.”

The collective-economy proposals are part of the EU’s broader single-market strategy, released in October, which tackles everything from venture capital rules to the bloc’s patchwork of insolvency laws. The 2016 to-do list also includes a “services passport” proposal, guidance on regulating professions, and legislation to prevent discrimination against consumers based on their nationality or country of residence.

If the EU can improve access to online goods and services, the commission estimates that more than 122,000 businesses would start marketing to consumers in other member nations, allowing as many as 70 million people to make cross-border purchases. Separate commission studies suggest a 1.8 percent increase in GDP is possible if the bloc can remove barriers to growth through a “more ambitious” implementation of its services directive.

Uber has already launched legal challenges against France, Germany and Spain in protest of what it says are national transportation rules that go against EU laws. Countries are also taking action: in December, the EU’s Court of Justice was asked by a Belgian court whether Uber’s ride-sharing services should be regulated as a taxi provider.

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“The European Union needs to lead and not to follow, and certainly not to obfuscate and drag its feet,” Mark MacGann, Uber’s head of public policy for Europe, the Middle East and Africa, said in an interview. “The unemployed youth in places like Spain, they’re not going to forgive the European Union if it considers this new collaborative economy as a problem to be solved, rather than an opportunity to be seized."
Airbnb has said its room-for-rent business would benefit from a systematic look at the EU landscape for non-traditional business models. In an Oct. 30 report to a U.K. House of Lords panel, the company said the EU shouldn’t draw too many connections between different types of technology-driven commerce.

“We must be careful that the commission does not assume that some kind of harmonized approach to all of these businesses, and all of the regulatory frameworks that govern them, will be appropriate –- or even feasible,” Airbnb said. “A search engine is a completely different kind of “platform” from an online music retailer, a peer-to-peer e-commerce website or an Internet television service.”

Before rolling out new regulations, the EU needs to look into why countries chose their existing regulations as well as acknowledge that current rules may not fit perfectly with the needs of the modern economy, Katainen said. If existing rules are getting in the way of new hiring, they should get a second look.

“It’s the cheapest way to stimulate the economy when you create a new market,” Katainen said. “There are plenty of companies who will use this opportunity. It’s the way we can stimulate the economy and increase investment in a sustainable manner without using taxpayers money.”